Ovation Company has a single product called a Bit. The company normally produces and sells $50,400$ Bits each year at a selling price

of $$41$ per unit. The company's unit costs at this level of activity are given below:

A number of questions relating to the production and sale of Bits follow. Each question is independent.

Requirec:

Assume that Ovation Company has sufficient capacity to produce $75,600$ Bits each year without any increase in fixed manufacturing

overhead costs. The company could increase its sales by $25\%$ above the current $50,400$ units each year if it were willing to increase

the fixed selling expenses by $$87,000.$

a$.$ Calculate the incremental net operating income.

Incremental operating income

Assume again that Ovation Company has sufficient capacity to produce $75,600$ Bits each year. A customer in a foreign market wants

to purchase $12,600$ Bits. Import duties on the Bits would be $$1\mathrm{.}70$ per unit, and costs for permits and licences would be $$5,670.$ Both

import duties and permits and licenses will be paid by Ovation. The only selling costs that would be associated with the order are

$$3\mathrm{.}30$ per unit shipping cost. Compute the per unit break$-$even price on this order. $($Do not round your intermediate calculations.

Round your answer to $2$ decimal places.$)$

Break$-$even price per unit

The company has $1,000$ Bits on hand that have some irregularities and are therefore considered to be "seconds." Due to the

irregularities, it will be impossible to sell these units at the normal price through regular distribution channels. What unit cost figure is

relevant for setting a minimum selling price? $($Round your answer to $2$ decimal places.$)$

Due to a strike in its supplier's plant, Ovation Company is unable to purchase more material for the production of Bits. The strike is

expected to last for two months. Ovation Company has enough material on hand to operate at $30\%$ of normal levels for the two$-$month

period. As an alternative, Ovation could close its plant down entirely for the two months. If the plant were closed, fixed manufacturing

overhead costs would continue at $60\%$ of their normal level during the two$-$month period and the fixed selling expenses would be

reduced by $20\%.$ What would be the impact on profits of closing the plant for the two$-$month period? $($Input the amount as a positive

value. Do not round your intermediate calculations.$)$

An outside manufacturer has offered to produce Bits and ship them directly to Ovation's customers. If Ovation Company accepts

this offer, the facilities that it uses to produce Bits would be idle; however, fixed manufacturing overhead costs would be reduced by

$75\%.$ Since the outside manufacturer would pay for all shipping costs, the variable selling expenses would be only two$-$thirds of their

current amount. Compute the unit cost that is relevant for comparison to the price quoted by the outside manufacturer. $($Do not round

your intermediate calculations. Round your answer to $2$ decimal places.$)$